At large companies, project sponsors often write business cases to convince leadership that a proposed project is a worthwhile investment.
As an entrepreneur, you may not need executive buy-in on your business ideas, but it’s still a good idea to put them to the test by writing a business case. It will give you a clear view into whether a project is worth your time and resources. It can also be a good resource when pitching to investors.
Here’s how to write a business case.
What is a business case?
A business case is a project management tool used to evaluate whether a proposed project is a good investment. It’s typically written by project sponsors who need to make the case for why their project is worth the business’s time and resources.
Writing one involves scrutinizing a project from all angles to determine whether it really is the best solution. It can also help businesses prepare for the costs and risks associated with a new venture or idea, which is why business cases can be useful for entrepreneurs as well.
9 elements to include in a business case
The challenge of writing a business case is that it should be brief while still covering every way in which the project will impact the business. Here are nine key elements worth including, with the business case for Dapper Boi, a body-inclusive and gender-neutral clothing line, as an example:
1. Problem
Any business case should provide a brief overview of the problem or opportunity. A well-written problem statement will help orient readers who aren’t as familiar with the project. For entrepreneurs and project sponsors, it’s good practice to clearly define the problem your product or service solves.
For example, Dapper Boi’s first product, gender-neutral slim-straight jeans, was inspired by a problem co-founder and CEO Vicky Pasche experienced.
“At that time, men’s jeans really didn’t have a ton of stretch,” Vicky says on an episode of Shopify Masters. “And then also women’s jeans still to this day are just not functional. It’s kind of ridiculous, and it shouldn’t be revolutionary to have functional pockets, so that was a huge selling point for us.”
Vicky launched a crowdfunding campaign to confirm that others had the same problem: Men’s jeans didn’t fit their bodies and women’s jeans lacked functionality.
2. Solution
This section of the business case explains why your proposed solution is better for solving your problem than any of the other options.
For Dapper Boi, the solution was to use stretch denim (98% cotton and 2% spandex) to design jeans that fit curvy bodies but have deeper pockets. An alternative solution may have been to use 100% cotton denim but add an elastic waistband. This section of the business case would explain why the stretch denim solution is superior to the elastic waistband. (For example, using surveys and focus groups to ask the target audience which design it prefers.)
In addition to your primary solution and at least one other alternative solution, your business case should include a “do nothing” scenario: What would the consequences be of ignoring the problem?
Vicky, alongside her wife and cofounder, Charisse Pasche, did this exercise in the early days of launching Dapper Boi when finances were tight.
“We said, ‘Where would the world be without Dapper Boy in 10 years?’ and that to us was like the biggest gut punch,” Vicky says. “We knew in that moment the impact that we have on people and society and that we need to keep going.”
3. Resources
Include the key resources needed to undertake this project. Which resources do you already have? Which do you need?
For Dapper Boi, finding a manufacturing partner was the biggest—and most important—hurdle. After a slew of rejections, Vicky says, “One manufacturer in particular finally emailed us back and was like, ‘I think you’re onto something here. I would love to connect you with our pattern maker.’
“This manufacturer was so helpful in showing us different brands and the kinds of fabrics we’d want to use.”
4. Costs
There are three main aspects of project costs to explore in your business case:
- Budget. What is the budget estimate for this project?
- ROI. Will this project make our business money? What is the return on investment (ROI), and when will we start to see that return?
- Cash flow. How will this project impact cash flow? Do we have the cash to invest in this now?
Dapper Boi originally set a crowdfunding goal of $18,000.
“At that time, I didn’t realize all the other business expenses and marketing dollars, things like that,” Vicky says. “It was just literally for the production.”
Vicky knew there was potential for the business to become profitable, since Dapper Boi’s limited pre-order stock kept selling out. But cash flow was an issue. With high demand and limited capital, Vicky and Charisse decided to sell their house. It was a hard decision, but the positive response they received from customers made it feel worthwhile.
5. Benefits
The benefits section is the place to answer the question: Why are we doing this?
Maybe your project proposal will increase efficiency and save your company money, or perhaps it will allow you to reach a new demographic. Explain how this project will help meet current business objectives and consider adding a cost-benefit analysis.
These reasons don’t need to be only financial benefits. “It’s not about the money here,” Vicky says. “It’s about that feeling of belonging.”
6. Scope
The project scope includes your deliverables and deadlines. You don’t need a complete timeline, but your business case should give readers an idea of what is and isn’t part of this project and when it will be complete.
For example, if you use crowdfunding, as Dapper Boi did, you’ll be accountable to your funders to deliver the rewards they selected.
7. Risks
There’s no way to anticipate all the challenges that might come your way, but a basic risk assessment can let your stakeholders know what to expect. Your risk assessment should also include a risk management plan: What will you do when challenges arise?
While crowdfunding is a great way to build relationships with customers, production costs often end up being higher than anticipated. So if you launch with a crowdfunding campaign like Dapper Boi did, it’s important to have a back-up financing plan.
8. Stakeholders
Most business cases list the key stakeholders associated with a project, such as the project sponsor, project manager, project team, and heads of teams or departments that the project will involve. For entrepreneurs, the stakeholders section might look a little different.
For Dapper Boi, the initial stakeholders were Vicky and her wife and cofounder, Charisse, followed by their crowdfunding investors. Once they found a manufacturer and pattern maker, those partners became stakeholders, too.
It’s important to identify your stakeholders early on, since their availability and capacity will influence your project timeline.
9. Metrics
Your business case should include how you plan to measure your project’s success. For a clothing line like Dapper Boi, that might look like the number of jeans sold or total sales revenue.
How to write a business case
You have a great idea. Now it’s time to sell it. Here’s how to write your business case to convince executives (or yourself!) it’s worthwhile:
1. Choose your template
Starting from a solid business case template gives you one less thing to worry about. Our free business case template includes fields with prompts for all nine essential elements plus space for an executive summary and your logo.
If you’d rather start from scratch, keep in mind that it can be helpful to your reader to create some kind of visual division between blocks of text.
2. Make your case
Now, it’s time to identify the problem, solution, resources, costs, benefits, scope, risks, stakeholders, and metrics associated with your project. That might sound like a lot, but ideally, your finished business case won’t be more than two pages long.
Write a brief, easy-to-read overview for each section. Use the template prompts and the examples from Dapper Boi as a guide. If you’re stuck, it can help to write out all of your ideas in a separate document and then edit them.
3. Write your executive summary
Once you have a solid draft of your business case, it’s time to write the executive summary. Your executive summary should be just a few sentences long and provide a very brief overview of the project.
It’s easiest to write this section last after you’ve already analyzed the nine aspects of your project.
4. Get feedback
Share your business case with someone you trust and ask for their feedback. Is the document easy to read and understand? After reading the business case, do they have a sense of why the project is worthwhile?
Once you’ve incorporated feedback, you can share your business case with your executives, stakeholders, or advisers.
Business case FAQ
What is the difference between a project proposal and a business case?
A project proposal outlines the problem, solution, and steps you will take to get there. A business case analyzes a proposed project to determine whether undertaking this project is the best possible business decision. A project proposal provides more details about the project itself, while a business case provides more details about how the project will impact the business as a whole.
What is an example of a business case?
In its business case, the clothing line Dapper Boi would define the problem: There was a lack of gender-neutral denim jeans on the market that were comfortable and functional for curvy bodies. By developing size-inclusive stretch denim jeans with deeper pockets and a more gender-neutral look (solution), Dapper Boi helped more people feel confident in their clothing (benefit).
What is the difference between a business case and a business plan?
A business plan describes a business strategy, including its goals, target market, marketing strategy, and financial plan. A business case is typically a shorter document that makes the case for why an existing business should undertake a new project.
